- Coffee prices ticked up +3.6% over the past week, but are down -35.6% on a year-over-year basis as global supply continues to outpace demand. Low coffee prices will remain a strong tailwind for SBUX, DNKN, GMCR, KKD, THI and other coffee retailers in 4Q13 and throughout 2014.
- Dairy costs have been volatile, but a favorable comparison in 4Q could support the outlook for CAKE, TXRH and others with exposure to dairy costs, if prices stay at or near current levels.
- Corn and wheat prices continue to provide retailers, restaurants and consumers with lower food costs than a year ago.
- Beef prices have been trending up YTD and should continue to pressure margins for BLMN, TXRH, CMG, WEN and others with significant exposure.
- Gasoline prices ticked up 40 bps over the past week, but are down -6% on a year-over-year basis and have provided consumers with some relief. We will continue to monitor this trend, as any sustained increase or decrease in gas prices could have a significant impact on the direction of discretionary spending.
- Strong correlation to the USD over the past 30 days:
- Milk +0.93
- Strong negative correlation to the USD over the past 30 days:
- Wheat -0.93
- Gasoline Prices -0.92
- Chicken Wings -0.89
- Sugar -0.88
- CRB Foodstuff Index -0.82
- Coffee -0.76